The containership market witnessed a year of contrast as overcapacity continued to pressure the boxship sector in 2018 despite some initial optimism, according to Alphaliner.

Charter rates rallied in the first half of 2018, but were only short-lived. Average rates fell in the second half and the year eventually ended with levels lower than twelve months ago.

Vessel deliveries reached 1.3 million TEU in 2018, surpassing the 1.2 million TEU of newbuildings that joined the fleet in 2017. Meanwhile, scrapping and other deletions dropped to a seven-year low with only 111,200 TEU deleted during the year, compared to the 427,000 TEU removed in 2017, Alphaliner noted.

“These two factors, together with a handful of vessels that were jumboised during 2018, drove the total cellular fleet up by 5.7% to reach 22.3 million TEU at the end of the year.”

The high net supply growth could not be matched by tonnage demand, leading to a surge in idle fleet which hit 628,000 TEU at the end of 2018, compared to only 416,000 TEU a year earlier.

“For the first time since 2011, the idle fleet dropped to below 200,000 TEU in the first half of 2018. Later in the year however, when weak operating margins forced carriers to slash capacity on various trade lanes, the idle fleet crept up again,” according to Alphaliner.

The increase of the inactive fleet was fueled by four service withdrawals on the Transpacific route in July and the temporary suspension of one high-capacity Asia-Europe string in September.